Dr. Ma's Trip to Canada

The Economic Impact of Uncertainty About
U.S. Regulations of the Energy Sector

by Xiaohan Ma (TTU) and Zhoudan Xie (GWU)

Presented at

The Society for Economic Measurement (SEM)
2022 Annual Conference

August 11-14, 2022

University of Calgary
2500 University Dr NW
Calgary, Canada

 
 
 
Abstract

This paper concerns the economic impact of uncertainty about U.S. regulatory policies of the energy sector. We first use natural language processing to create an oil regulatory uncertainty index based on more than a million news articles from a wide range of U.S. newspapers published between January 1985 and December 2021. We then conduct empirical analysis via structural VAR models with regulatory uncertainty and aggregate data. The impulse response functions suggest that an increase in oil regulatory uncertainty reduces oil production and operations, while also having negative effects on nationwide and state-level economic outcomes.

(paper in progress)